RAK Ceramics profit soars 3 times in 2021

The net profit of UAE-based multinational company RAK Ceramics (Bangladesh) Limited has jumped almost three times in 2021.

The listed company posted a profit of Tk 90.52 in 2021, up by 2.91 times from Tk 31.06 crore recorded in the previous year.

Higher earnings from sales, reduced tax rate and cost of goods helped the company bag the healthy profit, the company said on Thursday.

During the period, RAK Ceramics’ sales increased 29.54 per cent to Tk 685.11 crore from Tk 528.89 crore. As a result, its EPS (earnings per share) jumped from Tk 0.73 to Tk 2.12.

“Reduction of the tax rate by 2.5 per cent as per Finance Act 2021 impacted the profit after tax and improved the EPS,” it said.

Meanwhile, RAK Ceramics announced a 12.5 per cent cash dividend for the last financial year. It paid 10 per cent cash dividend for the previous year.

“Considering the investment requirements for up-gradation of the machinery of existing tiles plants, the board unanimously recommended a 12.50 per cent cash dividend,” it said.

However, the company’s cash flow declined 53 per cent in 2021 compared to the previous year.

“Cash collection from the customers has not been increased in the same proportion due to allowing additional credit term during the pandemic period which is impacting in net operating cash flow inversely,” it explained.

RAK Ceramics share price declined 6.45 per cent to Tk 55.10 on the Dhaka Stock Exchange on Thursday. The share price moved between Tk 26 and Tk 63.30 throughout the last one year.

The company has Tk 2,520 crore market capitalisation while its paid-up capital is Tk 428 crore and surplus reserve Tk 127 crore.

RAK Ceramic was incorporated in Bangladesh in 1998 and got listed with the stock exchanges in 2010.

‘A’ category company has two subsidiaries -- RAK Power and RAK security and services Private Limited.

Bangladesh’s ceramic industry’s local market size is Tk 6,000 crore. The industry is expected to be a major export earner within the next five years, according to the company’s latest annual report.

Currently, there are more than 60 ceramics manufacturers in the country with 20 more facilities in the pipeline, including those making tableware, tiles and sanitary ware.